March 23, 2004
CLA-2 RR:CR:TE 966688 TMFCATEGORY:CLASSIFICATIONTARIFF NO.:6105.10.0010
Port Director, Newark/New York c/o Residual Liquidation & Protest Branch 1100 Raymond Boulevard
Suite 402
Newark, New Jersey 07102RE: Eligibility of men’s knit garments containing foreign-origin collars and cuffs under the African Growth and Opportunity Act (AGOA)
Dear Sir or Madame:
This is in reply to your correspondence forwarding Application for Further Review of Protest (AFR) 4601-03-102152, filed by the law firm of McGuire Woods, LLP, on behalf of their client, Shopko Stores, Inc. Your office forwarded samples to this office for our review.FACTS:
The protest and request for Application for Further Review (hereinafter “AFR”), which was timely filed on July 16, 2003, is against Customs and Border Protection’s (CBP) classification and liquidation on June 6, 2003 of an entry containing men’s polo style shirts in subheading 6105.10.0010, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for cotton fiber men’s or boys’ shirts. Counsel for the protestant in the Memorandum in Support of Protest and Request for Further Review asserts that proper classification of the merchandise is in subheading 9819.11.12, HTSUSA, which provides for duty-free treatment of apparel goods under the AGOA.
Review of the AFR is warranted pursuant to 19 C.F.R. §§174.24 and 174.25 on the basis that CBP has not ruled on whether merchandise described herein which contains foreign-origin cuff material of the type in this case is eligible for preferential treatment under the African Growth and Opportunity Act (hereinafter referred to as “AGOA”).
The merchandise at issue, identified on the construction/make detail sheet as a “Men’s S/S Garment Washed Pique Polo”, style number 2308403, is a short sleeved men’s shirt which is offered in two fabric types: 60 percent cotton and 40 percent polyester pique knit fabric in light oxford; and a 100 percent cotton style in other solid colors. Our office received a sample of the merchandise in 100 percent cotton.
The construction/make detail sheet indicates that the collars and cuffs are constructed of 3-ply, 1x1 flat, rib knit fabric.
The submitted sample has two buttons and a partial front two-button placket opening which contains non-woven, fusible white interfacing, 1x1 rib knit spread construction collars and cuffs, and a hemmed bottom. We note that the detail sheet indicates that the garment back has a half-moon patch made of self-fabric measuring 4” from the neck seam but the subject sample does not have this feature.
Counsel for the protestant submitted two sample knit collars and cuffs. Each collar and cuff has a self-start edge along the length of the component and self-finished edges. The samples are one blue flat knit collar and four pink flat knit shirt cuffs. The collars and cuffs are knitted with a characteristic slight shaping at the collar edges and the edges of the cuffs. The collars have a slight inward curve at each finished edge and the cuffs have similar shaping. Each knit collar and cuff is separated by varying stitch pattern demarcation lines made of waste yarns that are snipped and removed to separate the individual components. The pink sample cuffs are knitted in continuous lengths in a rectangular shape.
Counsel for the protestant states that the rolls consist of rectangular shapes, approximately 17.5 inches in width and in continuous lengths. A typical roll consists of between 300 and 1,000 rectangles. After the rectangles are separated, they are trimmed before assembly.
The Multiple Country Declaration states that the fabric and accessories used to make the garment are produced in Hong Kong and they are cut, sewn and packed for export in Swaziland.ISSUE: Whether the subject men’s knit shirt, identified as style number 2308403, is eligible for preference under the African Growth and Opportunity Act?LAW AND ANALYSIS:
The African Growth and Opportunity Act (AGOA) provides certain specified trade benefits for countries of sub-Saharan Africa. These benefits include duty-free treatment for certain non-textile articles previously excluded from preferential treatment under the Generalized System of Preferences, and duty- and quota-free treatment for certain textile and apparel articles which meet the requirements set forth in Section 112 of the Act (codified at 19 U.S.C. 3721). Beneficiary countries are designated by the President of the United States after having met eligibility requirements set forth in the AGOA. Once designated, a beneficiary country is entitled to the duty-free treatment for the designated non-textile articles determined not to be import-sensitive in the context of imports from the beneficiary sub-Saharan African countries. A second designation by the United States Trade Representative (USTR), published in the Federal Register, that a beneficiary country has taken the measures required by the Act to prevent unlawful transshipment and has adopted an effective visa system, is necessary before a beneficiary country may enjoy the duty- and quota-free benefits extended to textile and apparel articles under the Act. Swaziland was designated a beneficiary country by Presidential Proclamation 7400, published in the Federal Register on January 23, 2001, 66 Fed. Reg. 7373. It was determined to be eligible for textile benefits under the AGOA by the USTR effective July 26, 2001. See 66 Fed. Reg. 41648, dated August 8, 2001
The provisions implementing the textile provisions of the AGOA in the Harmonized Tariff Schedule of the United States (HTSUS) are contained, for the most part, in subchapter XIX, Chapter 98, HTSUS (one provision may be found in subheading 9802.00.80, HTSUS). The regulations pertinent to the textile provisions of the AGOA may be found at §§ 10.211 through 10.217 of the Customs Regulations (19 C.F.R. 10.211 through 10.217).
Classification of the Subject Garment
The men’s knit shirt, identified as style number 2308403 is classifiable in subheading 6105.10.0010, Harmonized Tariff Schedule of the United States Annotated, HTSUSA, which provides for men’s or boys’ cotton knitted shirts.
Classification of Foreign Collars Used in the Subject Garment
The subject foreign origin collars are imported into Swaziland for use in the instant knitted men’s shirt. First we must consider whether the foreign origin collars used in the subject shirt are either knitted fabric of Chapter 60, HTSUSA, or made up articles under Chapter 61, HTSUSA. Note 7(f) of Section XI, HTSUSA, states that the term “Made Up” means, among other things, an article is “knitted or crocheted to shape, whether presented as separate items or in the form of a number of items in the length.” The collars used in the subject men’s shirt are made from 1x1 flat knit rib construction in Hong Kong for export to Swaziland. The collars are formed on rolls containing strips of pre-fabricated knit collars that are separate and identifiable by the use of noticeably visible, white colored, horizontal yarn-formed lines of demarcation. Prior to entry into Swaziland, the collars are presented in the form of a number of items in the length. In their condition as imported into Swaziland in roll form, they resemble a collar designed for further use in shirt formation. It is in Swaziland that the roll of collars are individually separated and then used in the assembly of the subject shirt.
CBP has issued rulings on substantially similar knitted shirt collars wherein it was determined that the use of foreign origin textile components would preclude apparel from eligibility for AGOA benefits within subheading 9819.11.12, HTSUSA. See Headquarters Ruling (HQ) 966584, dated September 22, 2003, denying AGOA preference to men’s golf shirts which contained foreign origin collars; HQ 966634, dated September 9, 2003, ruled that by application of GRI 2(a), HTSUSA, garments incorporating rib knit fabric containing pre-marked lines of demarcation that indicate where to cut to separate the section which would be further cut using a template were knit to shape components and not eligible for AGOA; HQ 965961, dated January 15, 2003, denying AGOA eligibility under subheading 9819.11.12, HTSUSA, for Taiwanese origin collars and cuffs that will be used in the assembly of men’s and boy’s knit shirts assembled in Lesotho; HQ 965871, dated September 25, 2002, denying AGOA eligibility under subheading 9819.11.12, HTSUSA, to men’s knit shirts using Asian-sourced collars, cuffs and accessories.
In each of the aforementioned rulings involving AGOA decisions, CBP determined that the use of foreign origin textile components would preclude apparel from eligibility for AGOA benefits within subheading 9819.11.12, HTSUSA.
Eligibility under Subheading 9819.11.12, HTSUSA
Apparel articles wholly assembled in a sub-Saharan African lesser-developed beneficiary country (LDBC) and directly imported into the U.S. are entitled to duty free and quota-free status, subject to certain restrictions. Such articles are entered under subheading 9819.11.12, HTSUS, which provides as follows:
Apparel articles wholly assembled, or knit-to-shape and wholly assembled, or both, in one or more such lesser developed countries enumerated in U.S. note 2(d) to this subchapter, subject to the provisions of U.S. note 2 to this subchapter, regardless of the country of origin of the fabric or the yarn used to make such articles, if entered during the period beginning on the date announced in a Federal Register notice issued by the United States Trade Representative and continuing through September 30, 2004, inclusive.
U.S. Note 2(d) lists Lesotho as qualifying for designation as a lesser-developed beneficiary country. U.S. Note 2, Subchapter XIX, Chapter 98, HTSUS, provides for a quantitative restriction for apparel articles classified in subheading 9819.11.12, HTSUSA.
The term "wholly assembled in", when used with reference to a textile or apparel article in the context of one or more beneficiary countries or one or more lesser developed beneficiary countries, means:
[A]ll of the components of the textile or apparel article (including thread, decorative embellishments, buttons, zippers, or similar components) were joined together in one or more beneficiary countries or one or more lesser developed beneficiary countries. See 19 C.F.R. 10.212.
The term "Knit-to-shape components”, when used with reference to textile components, means:
Components that are knitted or crocheted from a yarn directly to a specific shape containing a self-start edge. Minor cutting or trimming will not affect the determination of whether a component is "knit-to-shape." Id.
In the instant case, we find the roll of collars consists of knit-to-shape components that are made prior to importation into Swaziland by knitting or crocheting yarn directly to a specific shape of a collar component and that each contains a self-start, finished edge. In their condition as imported, the subject collars are incomplete, unfinished collars that will ultimately be used as collars in the subject shirt. They are created directly from yarn into knit to shape components that arrive into Swaziland in roll form. Individually, each 1x1 flat knit rib construction component is recognizable as a collar, not fabric. Therefore, it is our opinion that the subject collars are not fabric but garment parts.
We find that while subheading 9819.11.12, HTSUSA, allows for the use of foreign yarn or fabric in the production of apparel articles, it does not sanction the use of foreign origin textile components in the manufacture of apparel articles in lesser-developed countries. See HQ 966634, supra. Therefore, the subject men’s shirts are not accorded duty-free status as they incorporate foreign origin, knitted textile components.
Thus, the subject men’s knit shirt, which contains a foreign origin collar, does not qualify for AGOA eligibility.
Cuffs Used in the Subject Shirt
At this time, this office is in the process of reviewing comments received in response to a solicitation of comments on Interim Regulations, published as T.D. 03-15, to implement section 3108 of the Trade Act of 2002. See Notice, Trade Benefits Under the African Growth and Opportunity Act, 68 Federal Register 13820, dated March 21, 2003.
With regard to the cuffs used in the instant shirt, CBP has received comments in response to this notice which are directly related to instant sample knitted cuffs that you have submitted. As the Final Rule document will address this type of item in response to comments received, this office will not rule on the eligibility under AGOA of any garments that incorporate the subject cuffs at this time. Further, as we have determined that the collars used in the subject shirt precludes the shirt from receiving AGOA preference, it is not necessary to rule on the affect of the cuffs on the subject shirt’s eligibility.HOLDING:
The protest should be DENIED. The subject men’s knit shirt, identified as style 2308403, which contains foreign-origin collar components, does not qualify for AGOA preference due to the inclusion of foreign origin collars. Rather, it is classified in 6105.10.0010, Harmonized Tariff Schedule of the United States Annotated, HTSUSA, which provides for: men’s or boys’ shirt, knitted or crocheted: of cotton: men's. The general column one rate of duty is 19.7 percent ad valorem.
In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division